Translating the lessons from different markets into smart strategy
The factors that drive the investment case for smart meters and smart grids vary from country to country or from regulatory regime to regulatory regime. But generally they seek to address the sustained upwards pressure on energy costs due to growing global demand for primary fossil fuels and the need to address the effects of climate change.
The creation of the smart infrastructure cannot simply be viewed as a technology upgrade or a business transformation programme. For its true value to be realised it must be embraced as a fundamental market transformation; a transformation that will evolve over time with the changing attitudes of consumers and the development of innovative new technologies that satisfy their emerging needs.
Market Scenario 1:
High Deregulation – Diversity of Players
Highly deregulated and unbundled energy markets with a diversity of participants in the market have inevitably proved to be something of a double-edged sword when it comes to deployment of smart meters and the creation of smart grids.
The challenge for governments and regulators is to align coherently policy, legislation and regulation.
High levels of deregulation have done a good job in some regions of driving down costs and encouraging innovation by enabling competition and open markets, both essential elements of the evolution of smart grids.
Market Scenario 2:
Low Deregulation – Dominant Player
The challenge for policy makers, regulators and the energy companies together becomes one of ensuring the incentives are right to encourage engagement with consumers; something which will undoubtedly grow in importance as smart grids become reality in Europe’s consumer markets, accelerated by rising energy costs and the adoption of low carbon technologies.
Market Scenarion 3:
Low Deregulation – Diversity of Players
Each market player is an integrated business that is dominant in its own region and faces region-specific challenges, yet they are all bound by a single regulatory regime.
The challenge for the policy makers and regulators is to ensure that all a country’s consumers have access to broadly the same levels of service and benefits, regardless of where they live. But inevitable differences in process, capitalisation, population and demand across the regional incumbents presents the regulators with challenges in creating the appropriate incentives that will secure the required levels of investment from the market participants and their parent organisations.
Logica
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